Waterpower Information » How Hydro Works
Source: Primer on the Technologies of Renewable Energy
This technology uses a combination pumps/turbines to pump water from a lower reservoir to an upper reservoir for storage, and generates electricity as the water is released to a lower reservoir. The technology is similar to that used in standard hydro projects except that it uses the combination pumps/turbines to recycle water between the lower and upper reservoirs. This action repeats itself daily and sometimes even several times during a day. Pumped storage effectively works like a very large storage battery, with the elevated water acting as the source of stored energy.
Pumped storage can serve as a peaking plant by generating electricity when prices are high (typically during the day) and consuming electricity to drive the pump when prices are low. It can be also used to respond to short-term fluctuations in electricity demand/supply balance or stabilize the electrical grid. Aside from the ability to time-shift the generation of available power from other projects or nuclear facilities, pumped storage enables rapid responses to requests for generation and can be used to smooth intermittent energy delivery from sources such as wind and solar.
Pumped Storage Video - Statkraft